The inhibition of neuronal activity in the lateral hypothalamus (LHA) of the rat by the basolateral nucleus of the amygdala (AL) was investigated by analyzing evoked potentials, single unit discharges and intracellular synaptic potentials. A single volley to the AL induced a negative-positive-wave in the LHA. The negative-wave threshold was lower than that of the positive wave. Analysis of depth profiles showed that the negative- and positive-waves appeared first at the dorsal margin of the LHA, peaked within the LHA, and were clearly different from each other. The effects of acute lesions showed the negative-wave to be conducted through the direct amygdalo-hypothalamic pathway. The positive-wave: through the stria terminalis. Stimulation of the stria terminalis produced positive evoked potentials with latencies shorter than those of the positive-waves. When conditioning and test stimuli were delivered to the AL, the negative-wave was inhibited for about 90 msec by the evoked positive-wave. Single AL stimuli evoked single unit discharges followed by inhibition of spontaneous firing for about 100 msec. Single stria terminalis stimuli inhibited spontaneous firing for the duration of the positive evoked potential. Intracellular LHA recording during single AL stimuli showed the presence of an EPSP followed by a 100 msec long lasting IPSP. The negative and positive extracellular potentials corresponded to these synaptic potentials. Inward current injection of 1 to 1.4 nA reversed the IPSP's indicating a -15 mV hyperpolarization difference between the IPSP reversal potential and the resting potential in LHA cells. The ionic mechanism of the IPSP is also discussed.